Chairman Pitofsky has asked me to respond to Tom Vartanian’s letter of November 9, 1999, bringing to our attention the evolving draft sections of the ABA’s report on Transnational Jurisdiction in Cyberspace. As you may be aware, the FTC has been heavily involved in the ongoing dialogue about this subject as it relates to consumer protection. I commend you on addressing this increasingly important and complex set of issues.

Several sections of the report bear on issues relevant to our work, including the sections on Data Protection, the Sale of Goods and Services and, of course, Consumer Protection and Advertising. We understand that the recommendations in the evolving drafts are not quite ripe for detailed comments and that more developed discussion papers will be released for comment in early 2000. Accordingly, at this time we offer some general feedback about the process going forward and outline some of our broader substantive concerns.

First, with respect to the process, we urge you to include consumer representatives in the drafting process. We believe that participation by all stakeholders in discussions of important public policies such as this one is a necessary prerequisite to achieving a balanced outcome. Industry representatives have taken a keen interest in the issue of Internet jurisdiction, and have contributed actively to this project. Industry representatives have a legitimate interest in ensuring that the rules in the area of Internet jurisdiction are fair to business, predictable and will not unduly hinder the growth of electronic commerce. At the same time, consumers have an interest in ensuring that the rules are fair to consumers, and that they are afforded effective protection online that is not less than the protection available offline. I encourage you to ensure that consumer representatives have an active role in the ABA’s drafting process, to make sure that any recommendations can accomplish the goals of both industry and consumers.

Second, with respect to substantive issues, while we recognize that the Internet poses challenges to the current framework for jurisdiction, we encourage you to consider the impact of any changes to the current system. In particular, we are concerned about changes to the current framework that would: (1) give incentives to businesses to establish themselves, or rely on laws, in jurisdictions with weak consumer protections; (2) deny governments the right to protect their own citizens from fraud, unfairness, and deception; (3) deprive consumers of meaningful access to remedies; or (4) cause consumers to rely on insufficient, burdensome or unfamiliar protections. In addition, we already have in place a well-developed legal framework for consumer protection which applies to commercial practices online as well as offline. We see an important role for self-regulation in fostering informed decision-making and resolving disputes in an online context. We believe, however, that self-regulation should supplement the current legal consumer protection framework.

Again, I applaud you for taking on such a challenging but important project. My staff and I stand ready to assist you in this effort as you move forward, and to provide you with further comment as the drafts evolve.